Circuit City 2010 Annual Report Download - page 23

Results of Operations
Key Performance Indicators (in thousands):
NET SALES
SEGMENTS:
The Technology Products net sales increase is attributable to increased business to business and consumer channel sales worldwide as a result of
improved global economic conditions, the expansion of the number of retail stores in the United States and Canada and the continuing sales
contribution from our Circuit City and WStore Europe SA (“WStore”) acquisitions in 2009. On a constant currency basis, translating 2010
foreign results at 2009 exchange rates, and excluding the impact of the WStore acquisition on results, sales would have grown 7.9% or $230.6
million.
Industrial Products sales, primarily business to business, increased 27.5% as compared to last year. The sales increase, the majority of which was
driven by web sales, is attributable to improved economic conditions in North America in 2010 resulting in increased demand for the segment’s
various products as well as an increase in the number of products offered on its websites and in its catalogs.
The Company announced plans to exit its Software solutions segment during the second quarter of 2009. Substantially all of the third party
business activities of ProfitCenter Software have ended. Current and prior year results for this segment are now included in Corporate and other.
Years Ended December 31,
%
%
2010
2009
Change
2009
2008
Change
Net sales by segment:
Technology products
$
3,337,635
$
2,966,657
12.5
%
$
2,966,657
$
2,794,948
6.1
%
Industrial products
250,036
196,129
27.5
%
196,129
237,027
(17.3
)%
Corporate and other
2,318
3,209
(27.8
)%
3,209
986
225.5
%
Consolidated net sales
$
3,589,989
$
3,165,995
13.4
%
$
3,165,995
$
3,032,961
4.4
%
Net sales by geography:
North America
$
2,543,014
$
2,317,475
9.7
%
$
2,317,475
$
2,092,372
10.8
%
Europe
1,046,975
848,520
23.4
%
848,520
940,589
(9.8
)%
Consolidated net sales
$
3,589,989
$
3,165,995
13.4
%
$
3,165,995
$
3,032,961
4.4
%
Net sales by channel:
Consumer
$
1,819,803
$
1,764,514
3.1
%
$
1,764,514
$
1,645,021
7.3
%
Business to business
1,770,186
1,401,481
26.3
%
1,401,481
1.387.940
1.0
%
Consolidated net sales
$
3,589,989
$
3,165,995
13.4
%
$
3,165,995
3,032,961
4.4
%
Consolidated gross margin
13.8
%
14.5
%
(0.7
)%
14.5
%
15.1
%
(0.6
)%.
Consolidated SG&A costs
$
427,202
$
386,619
10.5
%
$
386,619
$
374,947
3.1
%
Consolidated SG&A
costs as % of sales
11.9
%
12.2
%
(0.3
)%
12.2
%
12.4
%
(0.2
)%
Operating income (loss) by segment:
Technology products
$
64,443
$
88,173
(26.9
)%
$
88,173
$
97,747
(9.8
)%
Industrial products
23,814
15,415
54.5
%
15,415
24,621
(37.4
)%
Corporate and other
(19,512
)
(29,959
)
(34.9
)%
(29,959
)
(38,756
)
(22.7
)%
Consolidated operating income
$
68,745
$
73,629
(6.6
)%
$
73,629
$
83,612
(11.9
)%
Operating margin by segment
:
Technology products
1.9
%
3.0
%
(1.1
)%
3.0
%
3.5
%
(0.5
)%
Industrial products
9.5
%
7.9
%
1.6
%
7.9
%
10.4
%
(2.5
)%
Consolidated operating margin
1.9
%
2.3
%
(0.4
)%
2.3
%
2.8
%
(0.5
)%
Effective income tax rate
35.6
%
36.8
%
(1.2
)%
36.8
%
36.9
%
(0.1
)%
Net income
$
42,551
$
46,185
(7.9
)%
$
46,185
$
52,843
(12.6
)%
Net margin
1.2
%
1.5
%
(0.3
)%
1.5
%
1.7
%
(0.2
)%
19